How to Refinance Mobile Home Park?

May 15, 2021

If you are an investor looking to refinance the mortgage of a mobile home park, there are a few things you need to consider. You probably already know that the financing process looks slightly different with mobile homes, but refinancing is still a lucrative option. Here is a quick guide to refinancing a mobile home park.

Why refinance mobile home park?

While the process to refinance a mobile home may differ slightly from other investments, the same benefits apply. Here are a few reasons why you would want to refinance your mobile home park:

  • Lower interest rate

Refinance your mobile home park to secure a lower interest rate. This lowers your monthly payment and keeps more money in your pocket. Investors can take advantage of the historically low-interest rates to invest back into their business.

  • Change mortgage term

If you need access to more cash, refinance to extend the life of the loan. You will ultimately pay more over the full life of the loan, but it’s a way to free up cash now. Shortening the loan term does the opposite – increase your monthly payment to decrease the total amount you pay on the loan in the long run.

Cash-out refinance

Cash-out refinances are a great option for investors. With cash-out refinance, you replace your existing mortgage with one higher than what you owe on the investment property. The difference goes to you in cash. You can use these funds for any needed renovations on the shopping center to help you make more money in the long term. You could also choose to invest that money into new projects or simply have emergency cash on hand.

Requirements to refinance mobile home park

Lenders need to determine that you and your business will be safe borrowers. They will consider many factors such as business credit, net operating income, and operating history. For mobile homes, there are also special requirements for refinancing. Every lender is different, but you can expect the following conditions for a mobile home park:

  • Converted to ‘real property’
  • Must be on land that you own
  • Affixed to a permanent foundation that conforms to HUD standards
  • Without axles, wheels, or a towing hitch
  • At least 400 square feet in size per mobile home unit

Converting your mobile home to real property

To be eligible to refinance your mobile home park, the properties need to be titled as ‘real property’. To convert a mobile home to real property, you will need to follow state and county guidelines. This process typically involves presenting the following documents:

  • Certificate of title to your mobile home
  • Copy of your mobile home’s certificate of origin

Deed to the land on which your mobile home’s permanent foundation is fixed

Key takeaways:

  • Refinancing your mobile home park can lower your monthly mortgage payment to free up money for other projects and investments.
  • Mobile home park investors can take advantage of ‘cash out’ refinances to get money on hand to invest back into your business and generate more income.
  • There are special requirements for refinancing a mobile home park.

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